Anticipated FOMC meeting expected to result in 25 bps rate cut, potentially impacting US Dollar

From Investing.com: 2024-12-18 05:48:00

The highly anticipated FOMC meeting today is expected to result in a 25 bps rate cut, with a slower pace of easing in 2025 due to President-elect Trump’s policies. The Fed’s reverse repo rate may also be adjusted, potentially impacting the US Dollar’s strength. Markets are looking for updates on the number of rate cuts expected next year, with a focus on a more cautious approach due to Trump’s economic plans. Policymakers have signaled support for a slower rate cut path, which could lead to a rise in US Yields and Dollar strength.

The minutes from the last FOMC meeting mentioned a possible technical adjustment to the Fed’s reverse repo rate, which could make the facility less appealing for banks. This could lead to a reduction in bank reserves, affecting the US Dollar’s strength. The Dollar is currently at a key level of 107.00, and is expected to maintain its dominance heading into 2025 if the Fed meets market expectations for slower rate cuts. The US Dollar’s strength could be influenced by the outcome of the FOMC meeting and President Trump’s upcoming policies.



Read more at Investing.com: FOMC Preview: What to Expect and How Will it Impact the US Dollar?